Intel May Sell Up to 49% of Foundry Business, But Full IPO Seems Unlikely

Intel has been exploring options to raise capital by selling stakes in its Intel Foundry manufacturing arm. Recently, Intel’s Chief Financial Officer confirmed that the company could theoretically sell up to 49% of Intel Foundry without conflicting with U.S. government agreements. However, a full spin-off or IPO of the foundry business appears unlikely in the near term due to ownership requirements.

Majority Ownership Requirement

Under Intel’s agreements with the U.S. government—stemming from grants and the CHIPS Act—Intel must maintain at least 51% ownership of Intel Foundry for the next five years. Selling below this threshold could trigger punitive clauses and dilute investor value. This majority ownership ensures Intel’s foundry operations align with U.S. national security goals and the effort to keep advanced manufacturing on American soil amid geopolitical risks.

Semiconductor Co-Investment Program (SCIP)

To raise capital without breaching ownership rules, Intel created the Semiconductor Co-Investment Program (SCIP). Through SCIP, Intel attracted around $26 billion from investors who co-own fabs at the asset level while Intel retains operational control and majority equity. For example, Arizona’s leading fabs, Fab 52 and Fab 62, are owned 51% by Intel and 49% by Brookfield Infrastructure, while Fab 34 in Ireland has a similar arrangement with Apollo Global Management.

This structure allows Intel to raise funds and expand capacity without spinning off the foundry business or triggering governmental restrictions. The foundry remains an integral part of Intel’s corporate operations, with Intel consolidating revenues and maintaining strategic control.

IPO Viability and Challenges

While the partial ownership model does not fully prevent an Intel Foundry IPO, it complicates valuation. Investors would consider the minority stake ownership in key fabs, potentially discounting the overall valuation. Intel’s share of profits from co-owned fabs is proportionally limited, which could make the IPO less financially attractive.

In addition, managing minority interests and payout obligations increases complexity and risk, factors that may deter investors or reduce the capital Intel could raise. As a result, Intel’s likelihood of spinning off Intel Foundry or launching a full IPO soon remains low unless market conditions and strategic priorities shift considerably.

Intel is expected to continue using SCIP for future investments in new fabs, including the planned Silicon Heartland site in Ohio, enabling growth while maintaining compliance with government agreements.